Effective March 17, 2023, the Colorado Division of Insurance (DOI) issued an update to 3 CCR 702-2 Regulation 2-1-12 Section 5(1) ; which states: 

Prior to selling any preneed contracts in this state, every preneed contract seller shall file an application with the Commissioner for the issuance of a license to sell preneed contracts in accordance with section 10-15-103, C.R.S. The initial application and each subsequent renewal application shall include either;

1. A surety bond posted in the amount of one hundred thousand dollars ($100,000) to honor preneed contract obligations; or
2. A current balance sheet, income statement, and statement of cash flow to demonstrate that the applicant has a net worth of at least one hundred thousand dollars ($100,000), either signed by a certified public accountant, or if prepared by the applicant or a public accountant, accompanied by a current tax return.

This will apply to the filing of the January 1, 2022–December 31, 2022 annual report which is due March 31, 2023.

What are Pre-Need Funeral Burial Contract Seller Surety Bonds?        

In the state of Colorado, a pre-need funeral burial contract seller surety bond is a requirement to secure a license allowing the licensee to sell pre-need funeral burial contracts.  The surety bond protects consumers if a pre-need funeral contract seller fails to fulfill their obligations. The bond acts as a guarantee to consumers that they will receive the services they have paid for in advance.      

Why are Pre-Need Funeral Burial Contract Seller Surety Bonds Required in Colorado?

Colorado requires pre-need funeral contract sellers to obtain surety bonds to ensure consumer protection and compliance with the state's requirements. In the event that a licensed burial contract seller fails to fulfill their obligations, the bond will provide compensation to affected consumers. This helps to maintain a level of consumer confidence in the pre-need funeral contract market when someone can show they are licensed and bonded.

How to Obtain a Pre-Need Funeral Burial Contract Seller Surety Bond in Colorado

To obtain a pre-need funeral burial contract seller surety bond in Colorado, follow these steps: 

• Determine the bond amount required by the state of Colorado (minimum $100,000).
• Submit an application for the bond and pay the premium.
• Wait for the bond to be issued and provide a copy to the state of Colorado Division of Insurance with your licensing application or renewal packet.